4th January 2024

Sorry we’re a little late today. You know, life.

Anyway, here’s Both Barrels with all you need to know today in oil, gas, and energy:

• 🍺 China’s downing LNG like cold beer in the Sahara

• 🤑 Gulf states’ embarrassments of riches

• 🛑 Disruption returns to Libya’s oil patch

• 📈 Suncor surging

• ➕ plus soggy straws; more top ups for the SPR; huge blast in Iran; Shell sticks up for BP; Europe braces for cold.

Lets get to it.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Suncor surging - the Canadian producer’s share price jumped ~6% after it reported a record monthly production of ~900 kb/d for December. Suncor also confirmed it cut 1,500 jobs in 2023, saving ~$450m a year.

• Shell backs up BP in Venture LNG battle - Shell wrote a letter to the US regulator supporting BP’s request that Venture LNG release information to determine why starting commercial operations at the Calcasieu Pass export facility has taken so long. Venture are raking it in by selling LNG on the spot market rather than meeting its long term contractual obligations to buyers like Shell and BP (allegedly).

• Little by little for the SPR - the White House will purchase another 3 mmbbls of oil for the SPR, taking the total of recent buys to 14 mmbbls. It has drained ~300 mmbbls over the past few years…

• Early start up for Talos GoM fields - oil & gas production from Talos’ Lime Rock and Venice discoveries began in December 2023 after a rapid 12 months development.

🏰 Europe

• Woolly jumpers at the ready - Europe has been blessed with a fairly mild winter so far this year, helping to keep a lid on natural gas prices and sparing its fragile energy system. That might be about to change though as a cold snap is expected to hit parts of the continent later this week.

⛩️ Asia & Oceania

• China regains title of world largest LNG importer - its LNG imports rose by 12% last year to 71 mtpa after declining in 2022 due to the impact of Covid and high prices. Chinese LNG demand is expected to surge in the coming years, climbing by 20% by the end of 2025 and nearly doubling by 2030. Gas makes up just 8.5% of China’s energy mix today so its growth has a loooong way to run.

🌍 GEOPOLITICS & MACRO

• Libya’s largest oilfield shuts down amid protests - after a period of relative calm, disruption has returned to Libya’s oil sector. The 300 kb/d El Sharara field (~25% of total Libyan production) in the southeast of the country was forced to close after local protesters disrupted the facility, demanding better services and opportunities for the region. Reports suggest the protests are spreading to other oilfields.

• Gulf state’s sovereign wealth funds top $4 trillion - that’s why they call it black gold. The five funds, three in UAE, one in Saudi, and in Qatar, are absolutely minted thanks to their lucky hydrocarbon endowments, and invested a total of $75 billion last year in everything from British football clubs to Japanese semiconductors. They’re buying the world and there’s no end in sight…

• OPEC’s united front - after Angola quit the group and amid suggestions it’s losing control of the oil market, OPEC released a statement reaffirming their “steadfast commitment to the shared objectives of unity and cohesion”. That’ll banish the doubters, I’m sure.

• Deadliest attack in Iran since the 70s - over 80 people have been killed in an explosion in Iran during a ceremony to mark the 2020 assassination of Iran’s Quds Force commander Qassem Soleimani. No one has taken responsibility for the attacks. Iranian officials inevitably blamed Israel but the most likely suspects are Sunni jihadist groups like IS.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• BP and Equinor cancel US offshore wind farm contract - in the face of rising costs, the companies have terminated their agreement to sell power to New York state from the proposed Empire Wind 2 offshore wind farm. They said they’ll look for new offtake opportunities for the project, presumably at a much higher price than in the original contract (which was already priced at the well-above-market-rate of $107.5 / MWh). Further setback for the struggling offshore wind industry.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO 

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Thanks for reading. Have a day out there. 🛢️🛢️